Shutdown 2013: Flyers Are Oblivious to Growing Impact on U.S. Airlines

Mary Schlangenstein and Caroline Chen and Julie Johnsson, Bloomberg

- Oct 09, 2013 7:20 am

Skift Take

Delayed aircraft deliveries are not yet impacting airlines’ operations, but the impact may become more evident as the delays snowball for airlines and manufacturers.

— Samantha Shankman

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Delta Air Lines Inc. and AMR Corp.’s American Airlines are waiting on new jets stuck as far afield as Germany with the partial shutdown of the U.S. government stalling deliveries across the global aerospace industry.

An Airbus SAS A319 due to be delivered today to American is still on the ground in Hamburg, joining other Airbus jets idled in Europe for JetBlue Airways Corp. and US Airways Group Inc. In Canada, Bombardier Inc. said it has a Delta-bound regional jet and a turboprop for a buyer it didn’t identify.

The tardy shipments show the fallout for airlines and planemakers from the federal stoppage even as air travel remains unaffected. Makers of smaller planes also may be pinched, because a government closing until mid-October would delay 130 aircraft valued at $1.5 billion amid the peak season for those deliveries, the General Aviation Manufacturers Association said.

“It wasn’t on people’s radar,” said George Hamlin, a former Airbus executive who runs Fairfax, Virginia-based Hamlin Transportation Consulting. “We haven’t had something like this happen. Everyone was preoccupied with the greater implications of the shutdown, and yet it impacts all sorts of things.”

Deliveries have been held up by the shuttering of a U.S. Federal Aviation Administration office in Oklahoma City, where the planes must be registered before they can fly in the U.S. FAA employees at that office aren’t among 800 being recalled to work this week.

Airbus Planes

While United Continental Holdings Inc. reported no disruptions involving its new aircraft, other airlines weren’t as lucky. Tempe, Arizona-based US Airways has a wide-body A330 at an Airbus facility in Toulouse, France, the planemaker’s home, and may face a late delivery this week for a single-aisle A321 that’s now in Hamburg. American’s A319 is marooned in Hamburg as well, as is JetBlue’s first A321.

“We’ve purchased it, but we can’t fly it back to the U.S. until it’s registered,” Mike Miller, a spokesman for New York- based JetBlue, said in an interview yesterday.

Boeing Co. is using temporary mail-in registration to avoid any delivery snarls, Doug Alder, a Boeing spokesman, said by e- mail. The registry regulations don’t apply to Boeing’s customers outside the U.S., according to Alder, who said the Chicago-based company was “taking steps to mitigate potential delays” while declining to say whether any deliveries had been halted.

Bombardier Planes

The customer for Bombardier’s stalled Q400 turboprop delivery isn’t being identified, said Marc Duchesne, a spokesman for the Montreal-based planemaker. Anthony Black, a Delta spokesman, said the delayed Bombardier CRJ900 regional jet was for the carrier’s Endeavor unit.

Embraer SA said “it could be affected in the coming weeks if the shutdown continues” even though the Sao Jose dos Campos, Brazil-based company hasn’t had any delays with regional jets for U.S. buyers.

The shutdown could threaten fourth-quarter deliveries, said GAMA, which represents light-aircraft makers and their suppliers. The year’s last three months typically account for 35 percent of annual general aviation aircraft shipments valued about $8 billion, GAMA said in a statement.

“The longer the shutdown continues, the more likely it is to cause economic difficulties and job losses,” GAMA said. Handovers of 12 planes already are stalled, according to the group, whose members include Boeing’s business-jets unit and Textron Inc.’s Bell Helicopter and Cessna Aircraft.

Service Dates

Late jets aren’t yet affecting U.S. airline operations, because many of the delayed planes aren’t due to enter service until November or later, the carriers said. That may change, according to consultant Hamlin.

“It’s good that some carriers have not been discomfited, but I would expect that to be a relatively brief period,” Hamlin said in a telephone interview. “I know of airplanes put in service almost immediately.”

American, whose planned merger with US Airways has been stalled by a federal antitrust lawsuit, is due to get two more A319s this month, said Andrea Huguely, an American spokeswoman. Those planes are among 16 A319s it will take this year to refresh one of the oldest U.S. airline fleets.

The FAA workers returning to their jobs this week were initially deemed nonessential for safety and sent home without pay when the shutdown began Oct. 1.

About three-quarters of those workers oversee major airline operations. Most of the others will keep an eye on the “most critical” production of aircraft and parts, according to an FAA statement.

With assistance from Christiana Sciaudone in Sao Paulo, Alan Levin in Washington and Frederic Tomesco in Montreal. Editors: Ed Dufner and Ben Livesey.

To contact the reporters on this story: Mary Schlangenstein in Dallas at maryc.s@bloomberg.net; Caroline Chen in New York at cchen509@bloomberg.net; Julie Johnsson in Chicago at jjohnsson@bloomberg.net. To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net.